Brazil – A 50bps SELIC hike expected in June, more in July

The Banco Central do Brasil's (BCB's) monetary policy committee (COPOM) is likely to deliver another 50bps hike when it meets on 3 June, taking the SELIC rate to 13.75%. 

Recent commentary from the central bank has been unequivocally hawkish - in particular, emphasising bringing inflation expectations down as a primary goal despite recession risks clearly on the rise. 

Key words such as "vigilance" and "perseverance" remain staples in BCB commentary, which is interpreted as a signal that policy rates have yet to peak. 

"The next COPOM meeting is on 29 July, when we expect another policy hike of at least 25bps",says Standard Chartered.

However if the BCB maintains its hawkish bias at the 3 June meeting, a 50bps hike in July could remain on the table.